Housing Market Unlocked For Young Professionals
Housing Market Unlocked For Young Professionals
100% home lending from BankDirect provides key for Generation X
BankDirect is New Zealand’s first bank to target Generation X New Zealanders with 100% home lending, making it easier for first home buyers to get on the property ladder.
Key features for BankDirect 100% Home Loan package:
100% home lending targeted at people aged 25-39, who meet our standard lending criteria.
Apply for a three month home loan repayment holiday after three years.
90/10 split fixed/variable rate.
Minimum income of $50,000 p.a. for main income earner.
Available for completed homes (no apartments/terraced homes).
BankDirect’s standard, competitive home loan rates apply.
No guarantee or deposit gift is required from parents.
A Low Equity Fee of 1.2% of the loan amount applies.
“It has been well documented that thanks to the boom in house prices, student loan debt and high rent, many young professional New Zealanders are finding it near impossible to buy a first home,” says Jim Anderson, Head of BankDirect. “We understand the pressures this generation face and have developed a home lending package specifically tailored to this group’s financial capabilities.”
The 100% Home Loan package is structured with a 10% variable component with the clear objective to help borrowers pay back 10% of their loan within five years.
‘Generation X’ is a moniker given to 25-39 year olds – a group representing approximately 20% of New Zealand’s population. Jim Anderson says this group also makes up the largest group of New Zealander’s intending to buy a first home.
“The 100% Home Loan package is about helping people fast forward their life goals, whilst managing their financial situation in a prudent manner. BankDirect is already established as a leader in terms of competitive home loan rates, and our direct banking proposition is popular with Generation X.
“The home loan holiday feature should quell many people’s fears that taking on a mortgage might prevent them from being able to achieve other goals, such as starting a family and being able to take maternity leave or taking a mini OE.”
Jim Anderson explains that the 100% Home Loan package simply adds to the bank’s range of products and services.
“BankDirect already has a range of products highly suited for these customers including Low Interest Visa, transaction and savings accounts. The 100% Home Loan package is a logical next step for our core market.
“People interested in the 100% Home Loan package are able to text the word home loan then their e-mail address to BankDirect’s short code 3003, and we will email them all the relevant information, or they can simply call us on 0800 500 400. In addition, we have developed a micro website to provide core information on the home loan package and topical information on home buying, such as five key steps to owning a home.”
100% home loans have proved popular amongst Generation X in other countries including the United Kingdom and Australia. A recent survey showed that in England nearly a quarter of first home buyers had opted for 100% mortgages. Typically, 100% mortgages overseas include a “shared equity” arrangement where the borrower’s financial institution takes some equity in the property.
Note to editors:
Almost half of Auckland tenants spend 30% or more of their household income on rent
Home ownership in New Zealand has fallen from nearly 74% of all households in 1991 to 65% in June last year.
The home ownership affordability gap has grown to 6.5 times the average wage (up from 4 times the average wage in the 1990s)
200,000 Generation X New Zealanders live in Auckland, Wellington and Christchurch and earn over $40,000 p.a.
BankDirect 100% Home Loan– In Detail
Minimum Employment 6 months
Maximum Loan to Home Valuation Ratio 100%
Minimum Income $50,000 p.a. for main income earner
Pricing 25 year term loan
10% (variable) over 5 years
90% interest only over 5 years (fixed), then principal and interest for remaining 20 years
(Note, if principal and income home loan holiday taken for 3 months after 3 years, the home loan will be restructured over remaining 22 year period)
Low Equity Fee 1.2% of loan amount (can be capitalised)
Risk Insurance Compulsory
Application Fee $500
Registered Valuation Required? Yes
Geography/Dwelling Type Existing completed dwelling – not terraced houses or apartments. Mainly metro regions.
Home Loan Holiday After 3 years, customers will be able to apply for a principal and interest home loan holiday for up to 3 months.
Building Inspection Report A Building Inspection report may be required for houses built between 1990 and 2004.
Other Applicants qualify for a BankDirect Low Interest Visa or Classic credit card.